REAL estate is emerging as Australia’s most in-demand sector as investors seek out the biggest beneficiaries of what they expect to be the start of a central bank easing cycle, the head of Citigroup’s Australian unit said.
“Five of our top six most in-demand companies are from the real estate sector,” Mark Woodruff, Citi’s chief executive officer for the region said at the bank’s Australia & New Zealand Investment Conference on Tuesday (Oct 15).
“As soon as we see an easing bias, real estate is one of the first to move,” Woodruff said. While the Reserve Bank of Australia is lagging behind other countries such as the US and New Zealand in cutting interest rates, investors are confident that “at least they are not going up”, he said.
Compounding the appetite is a stable outlook for Australia which enjoys solid economic growth, a strong fiscal position and relative isolation from geopolitical tensions, he said.
While Citi’s CEO Jane Fraser has previously warned the US economy is possibly heading for a recession in 2025, Australia is a “growth market” for the bank, Woodruff said.
Fraser’s restructure of the bank, which included jettisoning the bank’s retail business in Australia, has been completed faster than expected, though its shares have continued to lag US peers.
Fraser’s initiatives have focused on gleaning more from new middle markets such as expanding its wealth management practice to target more multimillionaires instead of just the ultra-rich as well as serving the smaller parts of multinational corporations through its new subsidiaries banking group. BLOOMBERG
